The governor’s proposal is to increase education funding by increasing the basic education revenue allowance by 4% the first year and by inflation in subsequent years. Over the course of 5 years this would look like the following;
Increasing the basic education revenue allowance doesn’t mean it’s the only component of the general education revenue formula that increases. Increasing this component also means increases will occur in the components that are linked to this one;
As an example, let’s look at the hypothetical changes to the revenue streams from the General Education Revenue Formula for Belgrade-Brooten-Elrosa Public School District. Table 1 shows that by increasing the basic education revenue component by 4% the first year with 3% inflationary increases in the four subsequent years increases the revenue streams for not only that specific component, but transportation sparsity, compensatory, sparsity, and declining enrollment. This change impacts some of the largest revenue streams in the General Education Revenue formula such as transportation sparsity, compensatory, and sparsity.
| Category | FY22 original funding per APU | FY27 proposed funding per APU | Pct Increase |
|---|---|---|---|
| Basic education | $6,728.00 | $7,875.32 | 17.1% |
| Transportation sparsity | $324.87 | $380.27 | 17.1% |
| Local optional aid | $280.02 | $280.02 | 0.0% |
| Compensatory | $279.53 | $327.19 | 17.1% |
| Sparsity | $230.59 | $273.27 | 18.5% |
| Small schools | $152.66 | $152.66 | 0.0% |
| Operating capital aid | $117.11 | $117.11 | 0.0% |
| Extended time | $44.46 | $44.46 | 0.0% |
| Pensions adjustment | $41.76 | $41.76 | 0.0% |
| Equity aid | $32.84 | $32.84 | 0.0% |
| English learners | $20.64 | $20.64 | 0.0% |
| Transition aid | $13.34 | $13.34 | 0.0% |
| Gifted and talented | $13.00 | $13.00 | 0.0% |
| Declining enrollment | $5.06 | $5.92 | 17.0% |
Just how much does these five components make up of the total General Education Revenue formula? The chart below provides the share of these five components (basic education, sparsity, transportation sparsity, compensatory, declining enrollment) of the entire general education framework. It clearly shows that these five components make up over 90% of the entire revenue provided to public and charter schools through the general education revenue framework.
However, there is plenty of variation across schools. And this variation does depend on whether it’s a charter or public school, it’s rural-ness and geography. The map below provides a clear pattern in the percent that those 5 linked components comprise of the total revenue each district receives from the general education formula in FY22. The highest percentages exist in districts with higher property values - suburbs, districts with lake properties. Over 95% of the revenue they receive from the general education formula comes from those 5 components. The other districts receive between 85% and 95% of their revenue from those 5 components.
So what causes this variation? The districts that have lower property values tend to rely a bit more on some of the equalization components in the general education formula that aren’t linked to the basic education component - namely local optional aid.
## [1] "District Name" "number"
## [3] "type" "categories"
## [5] "revenue.original" "linked.comp"
## [7] "group" "County Name"
## [9] "countyfp" "Dem_Desc"
## [11] "planning.region" "edr"
## [13] "awadm22" "total.rev.original.apu"
## [15] "total.rev.bsrevonly.apu" "total.rev.entire.formula.apu"
## [17] "total.rev.original" "unlinked.pct.total.rev"
## [19] "unlinked.rank"